We are making progress on mining tax: Ferguso


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16-06-2010 08:05 AM


ABC Canberra 666

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ABC Canberra 666


16-06-2010 08:05 AM



16-06-2010 08:45 AM

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2010-06-16 08:05:49

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LANE, Sabra



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We are making progress on mining tax: Ferguso -

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We are making progress on mining tax: Ferguson

Sabra Lane reported this story on Wednesday, June 16, 2010 08:06:00

TONY EASTLEY: The Federal Government has indicated that a "one size fits all" approach on its 40
per cent resource super profits tax won't work.

It's the first sign the Government is prepared to tweak the tax, since it was announced nearly six
weeks ago.

During a meeting of the Labor caucus yesterday, the Prime Minister thanked MPs and senators for
holding their nerve, in the face of protests against the tax proposal.

To discuss the latest on the negotiations over the tax, we're joined in our Canberra studio by the
Resources Minister Martin Ferguson, and he's speaking with Sabra Lane.

SABRA LANE: Minister welcome to AM.


SABRA LANE: You told caucus yesterday that a one size fits all does not necessarily work with this
tax, what do you mean?

MARTIN FERGUSON: I talked to caucus about the fact that many ways have got three different groups
coming at me - the petroleum sector, the low value resources such as gravel and the minerals
sectors. I indicated that they are each arguing that there is no one size fits all model.

What I'm doing is actually taking on board the generous transitional arrangements that we indicated
that we're prepared to think about it and working them through with the Prime Minister and the
Treasurer and treasury and actually thinking about what are the potential nature of those
transitional arrangements.

SABRA LANE: So you'll have different tax rates for different commodities rather than individual

MARTIN FERGUSON: No. I made it very clear to caucus we're not talking about different tax rates. As
I said to the parliament yesterday there will be a profits based tax system. That's what industry
wanted and there will be a headline rate of 40 per cent.

What I'm focusing on is what we've said we're prepared to focus on for some weeks - what are the
potential generous transitional arrangements that enable us to achieve our objective whilst also
maintaining a very strong pipeline of investment into Australia.

SABRA LANE: So you're looking to give special deals to particular sectors?

MARTIN FERGUSON: Not special deals but I am conscious of the fact that in transitional arrangements
there are different arguments in petroleum as it can for example some minerals products. What are
the taxing points for example? What is the potential solution to One Steel?

We'll make sure as the premier of South Australia has raised with me and as I've discussed for
example with One Steel that we take on board the special nature of their operations. And we already
said from day one for example that the issue of taxing point is central to our considerations.

SABRA LANE: It sounds, you met with British Gas yesterday, the company is looking to develop a coal
seam gas project in Queensland. In this case is the Government looking to abolish transitional
costs or?

MARTIN FERGUSON: From British Gas' point of view they clearly stated yesterday negotiations have
been productive but can I remind you this is a whole new industry. We've historically had offshore
oil and gas, we're talking about a new coal seam methane LNG export opportunity whilst also
supplying domestic gas in Australia.

That's just not, I might say, about the potential tax regime it's also about environmental
considerations and decisions going to pipeline infrastructure. They are the complex nature of the
issues I'm actually talking to British Gas about because this is a key investment for Australia -
about $12 to $15 billion.

SABRA LANE: It sounds like to me though that you're offering special incentives for different areas
and it sounds like a divide and conquer strategy.

MARTIN FERGUSON: Uh, not at all. I'm trying to work through what are the challenges to particular
sectors and for example British Gas, a new investor to Australia, a very significant potential
investor in Australia. They have issues that they want to discuss with me, I'm not going to talk
about those issues through the media and not should I they are confidential in nature.

But I am quietly working through it with the Prime Minister and the Treasurer the complex problems
that they have raised with me across a broad range of issues not just tax issues.

SABRA LANE: The Parliamentary Secretary for Western Australia Gary Gray yesterday said it would be
good if this was done and dusted by August. What do you think?

MARTIN FERGUSON: Oh, Gary's a good mate of mine and I understand the issues that he has raised, but
I take this view. I actually think we are now in productive discussions with a range of employers
who have actually got skin in the game across the Australian resources and energy sector.

Their willingness now to seriously discuss issues with government and to inform the process, I
suppose from an overall point of view, doesn't enable us to actually expedite our thinking and that
effectively means that we are better positioned to sort these details out sooner than later.

But I'm not going to put a timeline on it because there is a long way to go and I'm not going to
hasten outcomes and not get the appropriate balance right. In my opinion there can only be one cut,
we will announce what we think is appropriate, draw a line and then get on with life.

SABRA LANE: Is there a chance that this will drag on to a federal election campaign or would you
like in an ideal world to be done and dusted before then?

MARTIN FERGUSON: Oh in an ideal world I would like to settle it sooner than later but I'm going to
make sure as is the view of the Prime Minster and the Treasurer that we actually get it right. But
I also appreciate the need to try and resolve these matters with industry so as to create
investment certainty in Australia.

That's their objective and that is the objective of the Government and in the last week to ten days
I actually think we've made real progress, industry has sat down in a productive way as expressed
by British Gas yesterday.

They have assisted in forming our thinking 'cause I must say on a individual company basis they've
started to go through business profiles and a variety of issues of highly confidential, sensitive,
commercial nature. That enables the Government to actually think though what we describe as
generous transitional capacities.

SABRA LANE: Minster, thank you for your time.


TONY EASTLEY: The Resources Minister Martin Ferguson speaking there with our reporter in Canberra
Sabra Lane.